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October 31, 2006

Maverick Comes Around on GooTube Deal

Mark Cuban, owner of the Dallas Mavericks and noted tech blogger, has been in the news recently for crying “What were they thinking” about Google’s $1.65 billion acquisition of the Web video site YouTube. When the deal became public on Oct. 9, Cuban contended it would open Google up to a massive amount of legal vulnerability:

“Google Lawyers will be a busy, busy bunch. I don’t think you can sue Google into oblivion, but as others have mentioned, if Google gets nailed one single time for copyright violation, there are going to be more shareholder lawsuits than Doans has pills to go with the pile on copyright suits that follow.”

But by Monday, Cuban’s view of “GooTube’s” strategy seemed to have evolved.

Now Google’s decision to buy YouTube appears shrewd and crafty because it’ll get the big media owners — the most likely to sue the company over running their copyrighted video clips — off their backs. Cuban posted a detailed review of the deal, submitted by an anonymous author “whom I respect and trust.”

Here’s an excerpt:

“Since everyone was reaching into Google’s wallet, the big G wants to make sure the Youtube purchase was a wise one. Youtube’s value is predicated on it’s (sic) traffic and market leadership which Google needs to keep. (Google had media companies agree) to look the other way for the next 6 months or so while copyright infringement continues to flourish. … G knows that every day they can operate in the shadows of copyright law is another day that Youtube can grow. … (Google also asked media companies to) pile some lawsuits on competitors to slow them down and lock in Youtube’s position. … Universal obliged and sued two capable Youtube clones Bolt and Grouper. This has several effects. First, it puts enormous pressure on all the other video sites to clamp down on the laissez-faire content posting that is prevalent. If Google is agreeing to remove unauthorized content they want the rest of the industry doing the same thing. Secondly it shuts off the flow of venture capital investments into video firms.”

Google spokesman Jon Murchinson said he couldn’t comment on “rumor and speculation,” and YouTube also declined to comment.